Young contractors could solve skill shortage

Monday 8 September 2014

Young people who are setting up a business, a limited company or becoming umbrella company contractors could be the key to filling the skills gap in London.

This is the view of the Association of Independent Professionals and the Self Employed (IPSE), which was known as PCG up until very recently. It made this claim in response to research that showed a skills shortage in the capital, while there are a high level of young people in unemployment.

According to the CBI/KPMG London Business Survey, 45 per cent of London businesses believe that the city is suffering from a skills shortage. Two-thirds of firms in the capital said that they were having difficulty finding people who are highly skilled.

What's more, two of the sectors that are suffering most from the skills shortages are IT and creative industries. In fact 20 per cent of technology firms and 14 per cent of creative industries reported difficulties in finding the right people. These are two strongholds for the self employed.

In response to these findings, chief executive of IPSE Chris Bryce said: "This country should not be experiencing a skills shortage while 18 per cent of London's young people are unable to find work. It is crucial that schools and universities provide the skills companies are looking for so that young people leave education ready and able to find work.

“Planning for the future and making sure that UK has home-grown talent will make us even more competitive in the global economy. Be it through permanent employment or becoming their own boss, our young people hold the key to solving the skills shortage."

Responses from the 115 businesses surveyed showed that science, technology, engineering and maths training is in high demand. What's more, firms are seeking basic literacy and numeracy skills.

Part of the reason for the skills shortage is down to the increased level of growth, which means businesses have needed to increase their staff levels quickly. Yet they have been struggling to find people with the talent to match, so says London chairman of KPMG Richard Reid.

Indeed, 62 per cent of businesses say they are looking to increase their headcount over the next six months, which is up by ten per cent from the previous quarter. As a result, some companies are looking to younger generations to fill the gap, with some connecting with colleges and schools to offer work experience and career guidance.

Only 18 per cent of firms say they are planning to reduce their headcount over the next six months, which is a decrease of five per cent compared to the last quarter.

With the economy seeing sustained growth, firms are becoming more confident about their prospects moving forward. In fact, 59 per cent of firms are feeling optimistic about the economy, although this is growing at its slowest pace in a year.

Looking ahead to the next six months, 47 per cent of firms say they are feeling optimistic about their business prospects. What's more, 66 per cent are planning to expand over the next year, which is the highest figure recorded since the start of 2014.


By Victoria McDonnell

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